Resourcing key to success of UK’s economic crime plan

The new plan (90 pages / 1.59MB PDF) sets out targets for reducing money laundering and recovering more criminal assets; combatting ‘kleptocracy’ and driving down sanctions evasion; and cutting fraud over the period to 2026. It aims to build on the private-public partnership approach first set out in the economic crime plan for 2019-22, and provides a framework for how officials can take an integrated approach to meet modern challenges by drawing on relevant expertise.

Financial crime expert Andrew Sackey of Pinsent Masons said: “While the plan is, at this stage, light on detail, it sets out an ambitious wish list of well-reasoned goals, with some, albeit perhaps necessarily, loose timetabling. As with everything, its success will depend not only on the undoubted commitment of its participants but on their being properly resourced, skilled and, crucially, given appropriate autonomy to pursue these aims using their expertise to drive improvements. Time will tell.”

The plan also highlights anticipated reforms to the anti-money laundering (AML) supervisory regime, following a review of the regime published in June 2022.  A further consultation on proposals is anticipated later this year, alongside a new strategy for tackling environmental, social and governance (ESG) related fraud before the end of 2024. To ensure the plan succeeds, the government will recruit more than 400 new financial crime investigators dedicated to tackling money laundering and asset recovery.

Sackey said: “With abuse, by a minority, of UK corporate structures and the use of overseas entities and trusts identified as critical enablers of economic crime, the plan highlights the introduction last year of the Register of Overseas Entities. The register requires overseas companies to reveal the real identities of their beneficial owners to ensure criminals cannot hide behind opaque corporate structures, making it harder to launder illicit funds through the UK property market.”

He added: “The Economic Crime and Corporate Transparency Bill aims to build on this with reforms to Companies House designed to improve transparency in relation to UK companies and partnerships, as well as providing a more reliable Companies Register. The plan commits to implementation of this Bill, with Royal Assent anticipated in summer 2023.”

According to the plan, the government will also establish multi-agency ‘cells’ for combatting cryptoasset fraud, and will increase regulatory enforcement of unlawful cryptoasset activity and fintech-enabled economic crime. New inter-department action plans are intended to cut public sector fraud, as well as a review and potential expansion of Office of Financial Sanction Implementation (OFSI) enforcement guidance and its licensing framework.

Sackey said: “Visible outcomes will of course depend on the detail, but the plan also acknowledges that the response will require not only upskilling of expertise amongst investigators and intelligence officers and significant multi -agency pooling of knowledge, but also cross border prioritisation, cooperation and information sharing; and the investment in technology.”

The government has also recently announced the introduction of a new ‘failure to prevent’ fraud offence by way of amendment into the Economic Crime and Corporate Transparency Bill, and  is also exploring mechanisms for using illicit funds seized to combat economic crime. The plan also contains proposals for a new public-private economic crime data strategy, a cross-government analytics tool and initiatives to improve data sharing across agencies.

“Combatting fraud is seen as critical in the overall fight against crime, and the plan sets out a framework for the government’s forthcoming Fraud Strategy. That strategy is set to unveil ambitious plans to pursue fraudsters, block frauds and empower people to recognise and report frauds. The government has committed £100 million of new money over the next three years to tackle fraud,” Sackey said.